Diary

A 90% tax on bonuses is a horrible precedent!

The House just passed a bill taxing 90% of the bonuses given specifically to certain executives of AIG

Congress (Democrats, mostly), if you are going to bail out a company, you must understand that said company is still required by law to fulfill contractual obligations, including those with its own employees (something that wouldn’t necessarily have been true if AIG had filed for bankruptcy).

The outrage is false.  You knew that it was going to happen. 

You had the opportunity to put limits on executive compensation before you handed over the money, as a condition of the bailout.  You didn’t.

You can’t take it back, because Constitutionally you are forbidden from breaking legal contracts or writing laws to tax disbursements after the fact, so says Article 1 Section 10 of the Constitution.   The recipients will fight you and win, because you are breaking contract with the people that you took the money to pay those executives with in the first place.  Which you shouldn’t have done.  That makes you morons, twice!

 

And the third moronic thing you did was open a real can of worms, because the precedent you set for taxing people you don’t think give enough of their money back voluntarily, is a job killer.  Besides, the ultimate loophole is that companies won’t give bonuses anymore.  Nice going, Congress.